SECP Updates Audit Firm Requirements for Financial Entities

The Securities and Exchange Commission of Pakistan has altered the eligibility requirements for audit firms chosen by regulated financial institutions.

NationPulse Desk

Oct 27, 2026 · 9:36 AM 3 min read

Key takeaways

The SECP issued Circular No. 24 of 2026 to update the eligibility criteria for audit firms.

The new rules apply to lending non banking finance companies for financial years beginning on or after January 1, 2027.

Eligible audit firms are divided into categories based on asset thresholds and entity types.

Public interest companies must also appoint auditors registered with the Audit Oversight Board under Section 36K(a) of the SECP Act, 1997.

The Securities and Exchange Commission of Pakistan altered the eligibility requirements for audit firms chosen by financial institutions and other regulated entities, setting up modifications to its approved auditor roster. The commission released Circular No. 24 of 2026, which partially amends Circular No. 7 of 2026. This updated framework applies to organizations governed by multiple statutes, including the Companies Act, 2017, the Securities Act, 2015, the Futures Market Act, 2016, and the Insurance Ordinance, 2000. According to the circular, these new standards take effect for lending non banking finance companies appointing auditors for financial years starting on or after January 1, 2027. The SECP divided eligible accounting practices into tiers depending on entity types, licensing conditions, and asset thresholds.

First Category Covers Larger Regulated Entities

Accountancy practices in the initial tier can audit a wide selection of regulated bodies, such as securities exchanges, clearing houses, depository companies, futures exchanges, trading and clearing license holders among securities brokers, and asset management companies or pension fund managers holding assets under management of Rs50 billion or more. This tier additionally encompasses deposit-taking lending non banking finance companies, non deposit-taking lending non banking finance companies with assets of Rs1 billion or more, modarabas with assets of Rs1 billion or more, alongside real estate investment trusts, collective investment schemes, or voluntary pension schemes holding assets of Rs10 billion or more. Insurance, reinsurance, and takaful companies with total assets surpassing Rs10 billion, credit rating agencies, collateral management companies, and professional clearing members also fall under this bracket. The approved accounting firms in this group consist of A.F. Ferguson & Co., Baker Tilly Mehmood Idrees Qamar, BDO Ebrahim & Co., Crowe Hussain Chaudhury & Co., EY Ford Rhodes, Grant Thornton Anjum Rahman, Ilyas Saeed & Co., KPMG Taseer Hadi & Co., Kreston Hyder Bhimji & Co., Muniff Ziauddin & Co., Nasir Javaid Maqsood Imran, Parker Russell A.J.S., Rahman Sarfaraz Rahim Iqbal Rafiq, Reanda Haroon Zakaria Aamir Salman Rizwan & Co., Riaz Ahmad & Co., Rizwan & Co., RSM Awais Hyder Liaquat Nauman, S.M. Suhail & Co., Yousuf Adil, and UHY Hassan Naeem & Co.

Separate Category Covers Smaller Entities

The commission created a distinct classification for smaller regulated organizations, encompassing trading and self-clearing license holding securities brokers, alongside asset management companies, pension fund managers, and non banking finance companies with assets under management under Rs50 billion. It further includes non deposit-taking lending non banking finance companies with assets below Rs1 billion, modarabas with assets below Rs1 billion, real estate investment trusts, collective investment schemes, or voluntary pension schemes with assets under Rs10 billion, and insurance, reinsurance, or takaful providers possessing total assets of Rs10 billion or less. The approved firms for this classification are Amin Mudassar & Co., Fazal Mahmood & Co., H.A.M.D & Co., Junaidy Shoaib Asad, Malik Haroon Ahmad & Co., Mushtaq & Co., Naveed Zafar Ashfaq Jaffery & Co., PKF F.R.A.N.T.S., Riaz Ahmad, Saqib, Gohar & Co., ShineWing Hameed Chaudhri & Co., and Tariq Abdul Ghani & Co.

Other Entities Can Appoint ICAP Rated Auditors

Trading-only securities brokers, Pakistan Mercantile Exchange futures brokers, securities and futures advisers, modarabas holding assets under Rs200 million, insurance and reinsurance brokers, third-party administrators, corporate restructuring companies, trusts formed by corporate restructuring companies, along with balloters and share registrars, may select any audit practice holding a satisfactory quality control review rating issued by the Institute of Chartered Accountants of Pakistan. The commission specified that entities within the designated brackets qualifying as public interest companies under the Third Schedule to the Companies Act, 2017, must also select auditors registered with the Audit Oversight Board under Section 36K(a) of the SECP Act, 1997. Furthermore, asset management companies selecting auditors for collective investment schemes need to follow SECP Direction No. 05, released on February 23, 2026, alongside any subsequent directives from the commission.

Questions and answers

When do the updated audit criteria take effect for lending non banking finance companies?

The revised criteria apply to the appointment of auditors by lending non banking finance companies for financial years beginning on or after January 1, 2027.

What quality rating must other entities look for when hiring an audit firm?

Entities in the trading only category and similar groups may appoint any audit firm with a satisfactory quality control review rating from the Institute of Chartered Accountants of Pakistan.